Surviving Brexit

Spending Nothing is not the Same as Costing Nothing

During the past year, I have written several articles about performance improvement within the food and drink industry and the risks we face by doing nothing or not doing enough to keep pace with market developments and supermarket demands.

Many manufacturers were already struggling, with rising costs and fixed retail prices, to show a healthy bottom line profit. Then, along came the Referendum just over a year ago and apart from political soundbites such as ‘Brexit means Brexit’, we are still trying to understand what it all means. The resultant uncertainty during the past year has played havoc with the value of the pound, meaning that producers pay more for imported raw materials and find it harder to fill factory floor jobs due to the fall in the available migrant workforce, for fear of their post Brexit futures in the UK.

Number Crunching

The NFU, for example, has estimated that by 2021 we will need 95,000 seasonal migrants but Theresa May plans to impose a total migrant cap of 99,000 so already, the figures are looking ridiculous, insufficient even to support the status quo, let alone to drive growth. Even if all those migrants fill the agricultural jobs it doesn’t leave a lot for the food and drink industry, industry generally, the NHS or the hotel and restaurant trade, to mention a few of the more obvious employers who depend heavily upon such a workforce.

The only certainty in all this so far is that the uncertainty will doubtless continue. Whilst the EU negotiators appear to have done their homework and decided en bloc to punish the UK for leaving ‘the Club’, presumably as a deterrent to discourage other countries from doing likewise; our own ‘leaders’ still appear to be wrangling amongst themselves in desperation to present a coherent strategy to their EU opponents. Meanwhile, food and drink manufacturers still wrestle with the ever-increasing problems of rising material and labour costs, with little or no way to pass these on to their supermarket customers.

We will have to help ourselves

It would clearly be unwise for us to expect to receive any help from our government anytime soon or to see a sudden upsurge in the value of the pound.

Therefore, we are forced to work with what we have and to proceed with our continuous improvement programmes, but the imperative to deploy these more quickly and more effectively than ever has, for the aforementioned reasons, never been more urgent. We have briefly discussed in past weeks various tools to use along the lean six sigma route towards the ideological goal of performance optimisation. Some companies are already well on their way with this, some have made a spirited attempt and some have not yet started their journey.

From our visits to various sites, it is all too common to see huge piles of paperwork, which no doubt contain useful, even valuable, data but sadly little actionable information. The best-performing companies have recognised the risk inherent within paper-based systems and the fact that any valuable data which could lead to performance improvement is buried and therefore moribund.

Even those companies who have taken the plunge to eliminate paper and have fully computerised the factory floor data collection and information management haven’t always done so wisely. All too frequently they have implemented the cheapest paperless weighing system, the cheapest paperless quality system, the cheapest label verification system and the cheapest line efficiency/OEE system, which often don’t communicate with each other any more effectively than the people who were previously filling out the manual information sheets.

Not All Systems are Equal

The smart companies have deployed systems with not just paperless data recording, but also integrated information analysis and distribution of information, so that not only the problem (constraint) is obvious, but also the root cause of the problem. In addition, such systems can be so well honed that the people who need to know are informed timely enough to take action and limit damage/drive performance improvement.

Five Whys for the Wise

Apart from the obvious fishbone diagrams, to help diagnose root cause, many of our clients have found the Five Whys programme to be of particular benefit. One way in which this helps is in getting through the ‘blamers’ and the ‘premature conclusion jumpers’ by asking a succession of ‘Whys’ until the root cause is determined. For example, an on-line problem with excessive variation might encourage an instant response from the Engineering Department that the filler is ‘useless’. In asking ‘Why’, we might get a response ‘it’s too old’. In asking ‘Why’ a second time, we might get a response ‘we can’t get the spare parts’, in asking ‘Why’ again, we may find the conversation suddenly deviates to lack of maintenance. Asking ‘Why’ again might elicit a response of ‘insufficient engineers’. In asking ‘Why’ again, we might be told ‘budget cuts or inadequate training of existing engineers’. So, in this hypothetical example, we finally determine that the root cause could be a training issue.

Whilst there is no doubt that the Five Whys programme can ‘rough up’ some egos, it has proven to be an extremely useful method of getting to the real cause of a problem. Obviously, the ‘Five’ Whys is not to be taken too literally, but it does have the benefit of being an easy technique to learn, to implement and in many cases, has become the quickest way to determine the pinch points or constraints which inhibit overall performance effectiveness.

Our Business Improvement Managers are Lean Six Sigma trained to at least green belt standard and though we do not claim to be consultants, have sufficient understanding not only to provide the right tools for the right application but to encourage and train operational personnel in the best methodologies to drive performance improvement.

Please do not hesitate to contact the Harford team for further information and assistance.